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Federal courts are distinctly uncomfortable with the concept of trademark dilution. The 4th U.S. Circuit Court of Appeals calls it “dauntingly elusive.” The 2nd Circuit says it’s “somewhat nebulous.” And Professor J. Thomas McCarthy, the man to whom federal judges turn for guidance on such things, concedes that dilution is “not an easy concept to understand or explain.” What accounts for this confusion? In part, the amorphous term itself. No judge has been bold enough to say that he knows dilution when he sees it. But the greater part of the answer lies in the law’s ambivalence about trademarks generally. The traditional view is that trademarks are mere consumer tools, identifying the sources of products. They are not property and do not create rights in gross, i.e., apart from the products they identify. The more liberal view sees trademarks as property, or close to it. They are to be protected for their inherent value, apart from their utilitarian role as product identifiers. Thus, in applying the Federal Trademark Dilution Act of 1996, some judges have focused on consumers, and others on the marks themselves. A string of decisions, all coincidentally involving animals, illustrate the problem. THE GREATEST SHOW ON EARTH After 130 years of modestly promoting its circus, Ringling Brothers and Barnum & Bailey was not amused when the state of Utah adopted “The Greatest Snow on Earth” to advertise winter sports. But the 4th Circuit concluded in March 1999 that federal claims (unlike state claims) require proof of actual, consummated dilution, not mere likelihood thereof. Furthermore, dilution means harm to the mark’s selling power, not to its inherent distinctiveness. Since the court found no such harm had befallen the circus slogan, it affirmed judgment for Utah. In adopting the actual harm requirement, the 4th Circuit rejected any notion of property rights in trademarks. Instead, it asked: Do consumers associate the two marks so closely that the senior mark loses some of its power to identify and distinguish? GOLDFISH AND CATDOGS The 2nd Circuit took the opposite tack in an August 1999 decision siding with Pepperidge Farm. Nabisco had begun marketing a snack based on “CatDog,” a Cerberean cartoon creature, half-dog and half-cat, each with its own appetite. The snack included fish-shaped crackers (fish being the favored food of one-half of CatDog). Pepperidge Farm, of course, makes Goldfish crackers. The 2nd Circuit held that federal dilution claims do not require actual harm. While insisting that it was not creating a property right in gross, the court quoted a seminal 1927 law review article for the proposition that a mark’s value derives not only from “the merit of the goods upon which [the mark] is used, but equally [from its] own uniqueness and singularity.” In short, the 2nd Circuit focused on the mark, not on consumers. TONY THE TIGER The 6th Circuit poured more cold milk on the 4th Circuit’s analysis in an April 2000 decision favoring Kellogg’s tiger over Exxon’s. The old cats had coexisted peaceably for decades. Kellogg introduced Tony the Tiger in 1952, and Exxon began urging motorists to put a tiger in their tanks in 1959. After the 1989 Exxon Valdez disaster, Exxon updated its tiger to make it “more endearing, warm and friendly.” Kellogg became concerned in the early ’90s when that tiger began promoting food and drink at Exxon’s “Tiger Mart” gas-station convenience stores. In reversing dismissal of Kellogg’s dilution claim, the 6th Circuit implicitly followed the 2nd. Kellogg had offered no proof of actual harm. Indeed, it abandoned its claim for damages and asked only for injunctive relief based on a likelihood of future harm. PEOPLE EATING TASTY ANIMALS Last summer, a district court in Virginia (part of the 4th Circuit) cited the Ringling Brothers actual harm requirement in granting summary judgment for People for the Ethical Treatment of Animals (PETA) against the registrant of the peta.org domain name. The Web site proclaimed itself the home of People Eating Tasty Animals, and contained links to sites selling meat and leather goods. The district court found actual harm, since the Web site used the mark to link the public to commercial enterprises with interests directly antithetical to those of PETA. (The court was not swayed by the fact that PETA itself had once engaged in similar tactics; it had registered ringlingbrothers.com and voguemagazine.com, among others, to criticize those mark holders for alleged mistreatment of animals.) The split over actual harm reflects the rift over what courts are supposed to be protecting here. To the extent that dilution case law focuses on protecting marks rather than consumers, the law may be misreading history. In that seminal 1927 article, author Frank Schechter talked about “unique” marks: “coined, arbitrary or fanciful words or phrases that have … from the beginning been associated … with a particular product.” He was thinking of terms born to be trademarks, such as “Kodak.” In contrast, “The Greatest Show on Earth” is a slogan consisting of conventional words, meant to be taken literally. As for goldfish and tigers, they exist in nature. It’s hard to see why any company deserves a monopoly over their likenesses. But even for unique marks, the idea of treating trademarks as property conflicts with basic policy. We treat patents and copyrights as property to encourage more patentable inventions and copyrightable works. Need we encourage more trademarks? Unlike the products they identify, they add nothing to the wealth of nations. Reduced dilution protection will not cause a shortage of trademarks. Lawrence J. Siskind of San Francisco, Calif.’s Harvey Siskind Jacobs specializes in intellectual property law. He can be reached at [email protected]

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